Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB), a leader in
providing workforce solutions, today announced results for the
second quarter of 2013.
Carl T. Camden, President and Chief Executive Officer, announced
revenue for the second quarter of 2013 totaled $1.4 billion, a 0.1%
increase compared to the corresponding quarter of 2012.
Earnings from operations for the second quarter of 2013 totaled
$16.4 million, compared to $23.8 million reported for the second
quarter of 2012. Included in the results of operations in the
second quarter of 2013 are impairment charges of $1.7 million and
restructuring charges of $0.8 million. The results of operations in
the second quarter of 2012 included a benefit due to changes in the
estimated cost of restructuring of $2.2 million. Excluding the
impairment and restructuring charges, earnings from operations were
$18.9 million in the second quarter of 2013, compared to adjusted
earnings of $21.6 million last year.
Diluted earnings per share from continuing operations in the
second quarter of 2013 were $0.26 compared to $0.40 per share in
the second quarter of 2012. Adjusted earnings per share were $0.33
in the second quarter of 2013 compared to $0.34 in the second
quarter of 2012.
"We're pleased with our second quarter performance in each
operating segment, given the uneven and generally subpar global
economic growth," said Camden. "The Americas delivered solid
results that were in line with our expectations, considering both
our investment strategy and the lower volume we're experiencing. In
EMEA and APAC, we're proud of our efforts in recalibrating our
operations to bring costs in line with revenue in a tough
environment. In addition, the growth we are seeing in KellyOCG's
revenue and fees confirms that our solutions are meeting market
demand for outsourced talent management programs, and we believe
the investments we're making will support our long-term growth in
that segment."
Kelly also reported that on August 6, its board of directors
declared a dividend of $0.05 per share. The dividend is payable
September 9 to shareholders of record as of the close of business
on August 19.
In conjunction with its second quarter earnings release, Kelly
Services, Inc. will host a conference call at 9:00 a.m. (ET) on
August 7, to review the results and answer questions. The call may
be accessed in one of the following ways:
Via the Telephone:
U.S. 1 800 288-9626 International 1 651 291-5254
The pass code is Kelly Services
Via the Internet:
The call is also available via the internet through the Kelly
Services website: kellyservices.com
This release contains statements that are forward looking in
nature and accordingly, are subject to risks and uncertainties.
These factors include, but are not limited to, competitive market
pressures including pricing and technology introductions, changing
market and economic conditions, our ability to achieve our business
strategy, including our ability to successfully expand into new
markets and service lines, material changes in demand from or loss
of large corporate customers, impairment charges triggered by
adverse industry or market developments, unexpected termination of
customer contracts, availability of temporary workers with
appropriate skills required by customers, liabilities for
employment-related claims and losses, including class action
lawsuits and collective actions, liability for improper disclosure
of sensitive or private employee information, unexpected changes in
claim trends on workers' compensation and benefit plans, our
ability to maintain specified financial covenants in our bank
facilities, our ability to access credit markets and continued
availability of financing for funding working capital, our ability
to sustain critical business applications through our key data
centers, our ability to effectively implement and manage our
information technology programs, our ability to retain the services
of our senior management, local management and field personnel, the
impact of changes in laws and regulations (including federal, state
and international tax laws), the net financial impact of the
Patient Protection and Affordable Care Act on our business, risks
associated with conducting business in foreign countries, including
foreign currency fluctuations, and other risks, uncertainties and
factors discussed in this release and in the Company's filings with
the Securities and Exchange Commission. Actual results may differ
materially from any forward looking statements contained herein,
and we have no intention to update these statements.
About Kelly Services® Kelly Services, Inc. (NASDAQ: KELYA) (NASDAQ: KELYB)
is a leader in providing workforce solutions. Kelly® offers a
comprehensive array of outsourcing and consulting services as well
as world-class staffing on a temporary, temporary-to-hire, and
direct-hire basis. Serving clients around the globe, Kelly provides
employment to more than 560,000 employees annually. Revenue in 2012
was $5.5 billion. Visit kellyservices.com and connect with us on
Facebook, LinkedIn, and Twitter. Download The Talent Project, a
free iPad app by Kelly Services.
iPad is a trademark of Apple Inc., registered in the U.S. and
other countries. App Store is a service mark of Apple Inc.
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2013 2012 Change % Change
--------- --------- --------- --------
Revenue from services $ 1,366.9 $ 1,366.1 $ 0.8 0.1%
Cost of services 1,146.2 1,142.9 3.3 0.3
--------- --------- --------- --------
Gross profit 220.7 223.2 (2.5) (1.1)
Selling, general and
administrative expenses 202.6 199.4 3.2 1.6
Asset impairments 1.7 - 1.7 NM
--------- --------- --------- --------
Earnings from operations 16.4 23.8 (7.4) (30.9)
Other expense, net 1.6 0.5 1.1 234.2
--------- --------- --------- --------
Earnings from continuing
operations before taxes 14.8 23.3 (8.5) (36.5)
Income tax expense 4.8 8.3 (3.5) (42.4)
--------- --------- --------- --------
Earnings from continuing
operations 10.0 15.0 (5.0) (33.2)
Earnings from discontinued
operations, net of tax - - - NM
--------- --------- --------- --------
Net earnings $ 10.0 $ 15.0 $ (5.0) (33.2)%
========= ========= ========= ========
Basic earnings per share on
common stock
Earnings from continuing
operations $ 0.26 $ 0.40 $ (0.14) (35.0)%
Earnings from discontinued
operations - - - NM
Net earnings 0.26 0.40 (0.14) (35.0)
Diluted earnings per share on
common stock
Earnings from continuing
operations $ 0.26 $ 0.40 $ (0.14) (35.0)%
Earnings from discontinued
operations - - - NM
Net earnings 0.26 0.40 (0.14) (35.0)
----------------------------------------------------------------------------
STATISTICS:
Gross profit rate 16.1% 16.3% (0.2) pts.
Selling, general and
administrative expenses:
% of revenue 14.8 14.6 0.2
% of gross profit 91.8 89.4 2.4
% Return:
Earnings from operations 1.2 1.7 (0.5)
Earnings from continuing
operations before taxes 1.1 1.7 (0.6)
Earnings from continuing
operations 0.7 1.1 (0.4)
Net earnings 0.7 1.1 (0.4)
Effective income tax rate 32.2% 35.5% (3.3) pts.
Average number of shares
outstanding (millions):
Basic 37.2 37.0
Diluted 37.2 37.0
Shares adjusted for nonvested
restricted awards (millions):
Basic 38.2 37.8
Diluted 38.2 37.8
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 26 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2013 2012 Change % Change
--------- --------- --------- --------
Revenue from services $ 2,681.7 $ 2,720.9 $ (39.2) (1.4)%
Cost of services 2,244.1 2,274.0 (29.9) (1.3)
--------- --------- --------- --------
Gross profit 437.6 446.9 (9.3) (2.1)
Selling, general and
administrative expenses 412.4 408.4 4.0 1.0
Asset impairments 1.7 - 1.7 NM
--------- --------- --------- --------
Earnings from operations 23.5 38.5 (15.0) (38.9)
Other expense, net 2.6 1.1 1.5 137.7
--------- --------- --------- --------
Earnings from continuing
operations before taxes 20.9 37.4 (16.5) (44.0)
Income tax (benefit) expense (2.0) 13.2 (15.2) (115.4)
--------- --------- --------- --------
Earnings from continuing
operations 22.9 24.2 (1.3) (5.3)
Earnings from discontinued
operations, net of tax - 0.4 (0.4) (99.8)
--------- --------- --------- --------
Net earnings $ 22.9 $ 24.6 $ (1.7) (7.0)%
========= ========= ========= ========
Basic earnings per share on
common stock
Earnings from continuing
operations $ 0.60 $ 0.64 $ (0.04) (6.3)%
Earnings from discontinued
operations - 0.01 (0.01) (100.0)
Net earnings 0.60 0.65 (0.05) (7.7)
Diluted earnings per share on
common stock
Earnings from continuing
operations $ 0.60 $ 0.64 $ (0.04) (6.3)%
Earnings from discontinued
operations - 0.01 (0.01) (100.0)
Net earnings 0.60 0.65 (0.05) (7.7)
----------------------------------------------------------------------------
STATISTICS:
Gross profit rate 16.3% 16.4% (0.1) pts.
Selling, general and
administrative expenses:
% of revenue 15.4 15.0 0.4
% of gross profit 94.3 91.4 2.9
% Return:
Earnings from operations 0.9 1.4 (0.5)
Earnings from continuing
operations before taxes 0.8 1.4 (0.6)
Earnings from continuing
operations 0.9 0.9 0.0
Net earnings 0.9 0.9 0.0
Effective income tax rate (9.7)% 35.2% (44.9) pts.
Average number of shares
outstanding (millions):
Basic 37.2 36.9
Diluted 37.2 37.0
Shares adjusted for nonvested
restricted awards (millions):
Basic 38.2 37.8
Diluted 38.2 37.8
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
Second Quarter
-------------------------------------------
Constant
Currency
2013 2012 Change Change
--------- --------- ------ --------
AMERICAS
Commercial
Revenue from services
(including fee-based
income) $ 648.8 $ 668.6 (3.0)% (3.1)%
Fee-based income 4.0 4.2 (4.9) (4.5)
Gross profit 94.2 97.7 (3.6) (3.7)
Gross profit rate 14.5% 14.6% (0.1) pts.
PT
Revenue from services
(including fee-based
income) $ 259.6 $ 262.4 (1.1)% (1.2)%
Fee-based income 4.1 4.2 (3.5) (3.4)
Gross profit 41.1 39.7 3.5 3.4
Gross profit rate 15.8% 15.1% 0.7 pts.
Total Americas
Revenue from services
(including fee-based
income) $ 908.4 $ 931.0 (2.4)% (2.6)%
Fee-based income 8.1 8.4 (4.2) (4.0)
Gross profit 135.3 137.4 (1.6) (1.6)
Total SG&A expenses 103.8 99.0 4.8 4.8
Earnings from operations 31.5 38.4 (18.0)
Gross profit rate 14.9% 14.8% 0.1 pts.
Expense rates:
% of revenue 11.4 10.6 0.8
% of gross profit 76.7 72.0 4.7
Operating margin 3.5 4.1 (0.6)
EMEA
Commercial
Revenue from services
(including fee-based
income) $ 219.8 $ 213.7 2.8% 2.5%
Fee-based income 5.2 6.2 (16.9) (16.6)
Gross profit 33.8 34.2 (1.0) (1.8)
Gross profit rate 15.4% 16.0% (0.6) pts.
PT
Revenue from services
(including fee-based
income) $ 43.1 $ 41.6 3.6% 3.2%
Fee-based income 3.9 4.4 (12.0) (11.7)
Gross profit 10.5 10.9 (3.3) (3.6)
Gross profit rate 24.4% 26.1% (1.7) pts.
Total EMEA
Revenue from services
(including fee-based
income) $ 262.9 $ 255.3 3.0% 2.6%
Fee-based income 9.1 10.6 (14.9) (14.6)
Gross profit 44.3 45.1 (1.6) (2.2)
SG&A expenses excluding
restructuring charges 39.9 41.9 (4.7)
Restructuring charges - (2.2) 101.8
Total SG&A expenses 39.9 39.7 0.5 -
Earnings from operations 4.4 5.4 (17.3)
Earnings from operations
excluding restructuring
charges 4.4 3.2 40.5
Gross profit rate 16.9% 17.6% (0.7) pts.
Expense rates (excluding
restructuring charges):
% of revenue 15.2 16.4 (1.2)
% of gross profit 90.1 93.0 (2.9)
Operating margin
(excluding restructuring
charges) 1.7 1.2 0.5
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
Second Quarter
-------------------------------------------
Constant
Currency
2013 2012 Change Change
--------- --------- ------ --------
APAC
Commercial
Revenue from services
(including fee-based
income) $ 87.7 $ 84.3 4.0% 3.7%
Fee-based income 2.9 3.0 (7.8) (7.2)
Gross profit 12.5 12.5 - (0.2)
Gross profit rate 14.3% 14.9% (0.6) pts.
PT
Revenue from services
(including fee-based
income) $ 10.0 $ 12.8 (21.5)% (21.0)%
Fee-based income 2.5 4.1 (40.0) (39.7)
Gross profit 3.8 5.3 (29.6) (29.1)
Gross profit rate 37.4% 41.7% (4.3) pts.
Total APAC
Revenue from services
(including fee-based
income) $ 97.7 $ 97.1 0.7% 0.5%
Fee-based income 5.4 7.1 (26.2) (25.7)
Gross profit 16.3 17.8 (8.8) (8.8)
Total SG&A expenses 15.4 19.0 (19.0) (18.9)
Earnings from operations 0.9 (1.2) NM
Gross profit rate 16.6% 18.4% (1.8) pts.
Expense rates:
% of revenue 15.8 19.6 (3.8)
% of gross profit 94.7 106.6 (11.9)
Operating margin 0.9 (1.2) 2.1
OCG
Revenue from services
(including fee-based
income) $ 109.9 $ 91.4 20.2% 20.3%
Fee-based income 15.7 12.8 23.1 23.3
Gross profit 25.6 23.7 8.4 8.5
Total SG&A excluding
restructuring charges 25.6 22.8 12.4
Restructuring charges 0.8 - NM
Total SG&A expenses 26.4 22.8 15.6 15.6
Asset impairments 1.7 - NM
Earnings from operations (2.5) 0.9 NM
Earnings from operations
excluding restructuring
charges (1.7) 0.9 NM
Gross profit rate 23.3% 25.9% (2.6) pts.
Expense rates (excluding
restructuring charges):
% of revenue 23.3 25.0 (1.7)
% of gross profit 100.1 96.5 3.6
Operating margin
(excluding restructuring
charges) (1.5) 0.9 (2.4)
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
June Year to Date
-------------------------------------------
Constant
Currency
2013 2012 Change Change
--------- --------- ------ --------
AMERICAS
Commercial
Revenue from services
(including fee-based
income) $ 1,287.1 $ 1,337.9 (3.8)% (3.7)%
Fee-based income 7.9 7.7 3.3 4.1
Gross profit 187.7 195.7 (4.1) (3.9)
Gross profit rate 14.6% 14.6% - pts.
PT
Revenue from services
(including fee-based
income) $ 510.6 $ 512.5 (0.4)% (0.5)%
Fee-based income 8.0 7.6 4.1 4.1
Gross profit 81.5 79.9 1.9 1.9
Gross profit rate 16.0% 15.6% 0.4 pts.
Total Americas
Revenue from services
(including fee-based
income) $ 1,797.7 $ 1,850.4 (2.9)% (2.8)%
Fee-based income 15.9 15.3 3.7 4.1
Gross profit 269.2 275.6 (2.3) (2.2)
Total SG&A expenses 213.0 201.9 5.5 5.6
Earnings from operations 56.2 73.7 (23.7)
Gross profit rate 15.0% 14.9% 0.1 pts.
Expense rates:
% of revenue 11.8 10.9 0.9
% of gross profit 79.1 73.3 5.8
Operating margin 3.1 4.0 (0.9)
EMEA
Commercial
Revenue from services
(including fee-based
income) $ 420.8 $ 426.7 (1.4)% (1.5)%
Fee-based income 10.7 12.3 (13.4) (13.2)
Gross profit 64.9 67.7 (4.1) (4.4)
Gross profit rate 15.4% 15.9% (0.5) pts.
PT
Revenue from services
(including fee-based
income) $ 86.6 $ 83.8 3.3% 3.1%
Fee-based income 7.9 9.0 (12.6) (12.4)
Gross profit 21.2 22.2 (4.4) (4.5)
Gross profit rate 24.5% 26.4% (1.9) pts.
Total EMEA
Revenue from services
(including fee-based
income) $ 507.4 $ 510.5 (0.6)% (0.7)%
Fee-based income 18.6 21.3 (13.1) (12.9)
Gross profit 86.1 89.9 (4.2) (4.4)
SG&A expenses excluding
restructuring charges 82.1 86.4 (5.0)
Restructuring charges (0.2) (2.2) 93.8
Total SG&A expenses 81.9 84.2 (2.7) (2.9)
Earnings from operations 4.2 5.7 (25.7)
Earnings from operations
excluding restructuring
charges 4.0 3.5 16.0
Gross profit rate 17.0% 17.6% (0.6) pts.
Expense rates (excluding
restructuring charges):
% of revenue 16.2 16.9 (0.7)
% of gross profit 95.2 96.1 (0.9)
Operating margin
(excluding restructuring
charges) 0.8 0.7 0.1
KELLY SERVICES, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
(In millions of dollars)
June Year to Date
-------------------------------------------
Constant
Currency
2013 2012 Change Change
--------- --------- ------ --------
APAC
Commercial
Revenue from services
(including fee-based
income) $ 169.2 $ 172.6 (2.0)% (2.0)%
Fee-based income 5.6 6.4 (13.4) (12.5)
Gross profit 24.1 25.6 (5.9) (5.7)
Gross profit rate 14.2% 14.8% (0.6) pts.
PT
Revenue from services
(including fee-based
income) $ 20.2 $ 25.6 (21.2)% (20.5)%
Fee-based income 4.5 8.1 (45.4) (45.0)
Gross profit 7.1 10.5 (33.1) (32.5)
Gross profit rate 34.9% 41.1% (6.2) pts.
Total APAC
Revenue from services
(including fee-based
income) $ 189.4 $ 198.2 (4.5)% (4.3))%
Fee-based income 10.1 14.5 (31.2) (30.6)
Gross profit 31.2 36.1 (13.8) (13.5)
SG&A expenses excluding
restructuring charges 31.0 38.7 (20.0)
Restructuring charges 0.2 - NM
Total SG&A expenses 31.2 38.7 (19.4) (19.1)
Earnings from operations - (2.6) 98.9
Earnings from operations
excluding restructuring
charges 0.2 (2.6) NM
Gross profit rate 16.4% 18.2% (1.8) pts.
Expense rates (excluding
restructuring charges):
% of revenue 16.3 19.5 (3.2)
% of gross profit 99.3 107.1 (7.8)
Operating margin
(excluding restructuring
charges) 0.1 (1.3) 1.4
OCG
Revenue from services
(including fee-based
income) $ 208.9 $ 178.1 17.3% 17.4%
Fee-based income 30.3 24.4 24.4 24.7
Gross profit 52.7 46.8 12.6 12.8
SG&A expenses excluding
restructuring charges 51.0 45.4 12.3
Restructuring charges 0.8 - NM
Total SG&A expenses 51.8 45.4 13.9 14.0
Asset impairments 1.7 - NM
Earnings from operations (0.8) 1.4 NM
Earnings from operations
excluding restructuring
charges - 1.4 NM
Gross profit rate 25.2% 26.3% (1.1) pts.
Expense rates (excluding
restructuring charges):
% of revenue 24.4 25.5 (1.1)
% of gross profit 96.8 97.1 (0.3)
Operating margin
(excluding restructuring
charges) - 0.7 (0.7)
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions of dollars)
June 30, Dec. 30, July 1,
2013 2012 2012
--------- --------- ---------
Current Assets
Cash and equivalents $ 70.3 $ 76.3 $ 65.2
Trade accounts receivable, less
allowances of $9.8 and $10.4 and $11.8,
respectively 1,038.8 1,013.9 985.0
Prepaid expenses and other current assets 60.0 57.5 57.9
Deferred taxes 39.0 44.9 33.4
--------- --------- ---------
Total current assets 1,208.1 1,192.6 1,141.5
Property and Equipment, Net 87.2 89.9 90.3
Noncurrent Deferred Taxes 103.1 82.8 93.4
Goodwill, Net 90.3 89.5 91.4
Other Assets 227.8 180.9 168.4
--------- --------- ---------
Total Assets $ 1,716.5 $ 1,635.7 $ 1,585.0
========= ========= =========
Current Liabilities
Short-term borrowings $ 83.2 $ 64.1 $ 88.5
Accounts payable and accrued liabilities 289.2 295.6 269.5
Accrued payroll and related taxes 277.9 264.5 253.7
Accrued insurance 31.2 32.8 30.3
Income and other taxes 64.9 65.3 56.5
--------- --------- ---------
Total current liabilities 746.4 722.3 698.5
Noncurrent Liabilities
Accrued insurance 41.4 43.5 51.4
Accrued retirement benefits 123.2 111.0 102.8
Other long-term liabilities 28.2 17.9 24.0
--------- --------- ---------
Total noncurrent liabilities 192.8 172.4 178.2
Stockholders' Equity
Common stock 40.1 40.1 40.1
Treasury stock (60.6) (61.6) (63.2)
Paid-in capital 28.9 27.1 27.4
Earnings invested in the business 719.1 700.0 678.3
Accumulated other comprehensive income 49.8 35.4 25.7
--------- --------- ---------
Total stockholders' equity 777.3 741.0 708.3
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 1,716.5 $ 1,635.7 $ 1,585.0
========= ========= =========
------------------------------------------- ---------- ---------- ----------
STATISTICS:
Working Capital $ 461.7 $ 470.3 $ 443.0
Current Ratio 1.6 1.7 1.6
Debt-to-capital % 9.7% 8.0% 11.1%
Global Days Sales Outstanding 54 53 53
KELLY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 26 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars)
2013 2012
--------- ---------
Cash flows from operating activities
Net earnings $ 22.9 $ 24.6
Noncash adjustments:
Impairment of assets 1.7 -
Depreciation and amortization 10.5 11.6
Provision for bad debts 0.5 0.6
Stock-based compensation 2.6 2.1
Other, net 0.7 -
Changes in operating assets and liabilities (53.1) (33.0)
--------- ---------
Net cash (used in) from operating activities (14.2) 5.9
--------- ---------
Cash flows from investing activities
Capital expenditures (7.7) (9.8)
Other investing activities (0.2) -
--------- ---------
Net cash used in investing activities (7.9) (9.8)
--------- ---------
Cash flows from financing activities
Net change in short-term borrowings 19.1 (7.8)
Dividend payments (3.8) (3.8)
--------- ---------
Net cash from (used in) financing activities 15.3 (11.6)
--------- ---------
Effect of exchange rates on cash and equivalents 0.8 (0.3)
--------- ---------
Net change in cash and equivalents (6.0) (15.8)
Cash and equivalents at beginning of period 76.3 81.0
--------- ---------
Cash and equivalents at end of period $ 70.3 $ 65.2
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
Second Quarter (Commercial, PT and OCG)
---------------------------------------
% Change
Constant
2013 2012 US$ Currency
--------- --------- -------- --------
Americas
United States $ 864.3 $ 874.4 (1.2)% (1.2)%
Canada 55.0 62.0 (11.3) (10.1)
Mexico 35.9 25.8 38.9 27.9
Puerto Rico 26.1 25.9 0.5 0.5
Brazil 13.4 14.4 (7.0) (0.9)
--------- ---------
Total Americas 994.7 1,002.5 (0.8) (0.9)
EMEA
France 62.3 61.1 2.0 0.1
Switzerland 63.6 59.8 6.3 6.8
Russia 34.6 31.8 9.1 11.2
United Kingdom 25.8 26.0 (1.0) 2.0
Portugal 21.1 19.0 11.2 9.0
Germany 15.9 17.4 (8.9) (10.7)
Norway 15.4 16.7 (8.1) (9.2)
Italy 14.7 15.1 (2.4) (4.4)
Other 17.3 15.6 11.4 9.2
--------- ---------
Total EMEA 270.7 262.5 3.1 2.8
APAC
Australia 35.3 32.3 9.1 11.2
Singapore 28.0 24.9 12.4 11.1
Malaysia 17.2 18.0 (4.2) (5.6)
New Zealand 12.0 13.4 (10.2) (13.6)
Other 9.0 12.5 (27.7) (25.5)
--------- ---------
Total APAC 101.5 101.1 0.4 0.3
Total Kelly Services, Inc. $ 1,366.9 $ 1,366.1 0.1% (0.1)%
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
REVENUE FROM SERVICES
(UNAUDITED)
(In millions of dollars)
June Year to Date (Commercial, PT and
OCG)
---------------------------------------
% Change
Constant
2013 2012 US$ Currency
--------- --------- -------- --------
Americas
United States $ 1,703.8 $ 1,732.9 (1.7)% (1.7)%
Canada 111.0 121.5 (8.6) (7.7)
Mexico 66.3 51.3 29.3 22.4
Puerto Rico 49.2 51.8 (5.1) (5.1)
Brazil 31.9 32.4 (1.8) 8.7
--------- ---------
Total Americas 1,962.2 1,989.9 (1.4) (1.3)
EMEA
France 119.6 123.9 (3.5) (4.7)
Switzerland 117.0 113.4 3.2 4.0
Russia 69.1 65.4 5.7 7.4
United Kingdom 51.6 53.7 (3.9) (1.9)
Portugal 38.9 37.2 4.5 3.2
Germany 31.9 36.1 (11.8) (12.9)
Norway 30.2 33.2 (9.0) (10.7)
Italy 29.8 31.4 (4.9) (6.1)
Other 34.7 31.2 11.3 9.7
--------- ---------
Total EMEA 522.8 525.5 (0.5) (0.6)
APAC
Australia 68.0 66.2 2.8 4.6
Singapore 54.1 49.1 10.3 8.5
Malaysia 33.9 35.8 (5.3) (5.7)
New Zealand 23.5 26.5 (11.4) (14.0)
Other 17.2 27.9 (38.3) (35.6)
--------- ---------
Total APAC 196.7 205.5 (4.3) (4.1)
Total Kelly Services, Inc. $ 2,681.7 $ 2,720.9 (1.4)% (1.4)%
========= =========
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 13 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2013 2012
--------------------------------------- --------
Restruct- Asset
uring Impair-
As Charges ments Adjusted Adjusted %
reported (Note 1) (Note 2) Earnings Earnings Change
-------- --------- --------- -------- -------- ------
Revenue from
services $1,366.9 $ - $ - $1,366.9 $1,366.1 0.1%
Cost of services 1,146.2 - - 1,146.2 1,142.9 0.3
-------- --------- --------- -------- -------- ------
Gross profit 220.7 - - 220.7 223.2 (1.1)
Selling, general
and
administrative
expenses 202.6 (0.8) - 201.8 201.6 0.1
Asset impairments 1.7 - (1.7) - - NM
-------- --------- --------- -------- -------- ------
Earnings from
operations 16.4 0.8 1.7 18.9 21.6 (12.5)
Other expense, net 1.6 - - 1.6 0.5 (234.2)
-------- --------- --------- -------- -------- ------
Earnings from
continuing
operations before
taxes 14.8 0.8 1.7 17.3 21.1 (18.3)
Income tax expense
(benefit) 4.8 - - 4.8 8.3 (42.4)
-------- --------- --------- -------- -------- ------
Earnings from
continuing
operations $ 10.0 $ 0.8 $ 1.7 $ 12.5 $ 12.8 (5.8)%
======== ========= ========= ======== ======== ======
Earnings per share
from continuing
operations:
Basic $ 0.26 $ 0.02 $ 0.04 $ 0.33 $ 0.34 (2.9)%
Diluted $ 0.26 $ 0.02 $ 0.04 $ 0.33 $ 0.34 (2.9)%
2012
-----------------------------
Restruct-
uring
As Charges Adjusted
reported (Note 1) Earnings
-------- --------- ---------
Revenue from
services $1,366.1 $ - $ 1,366.1
Cost of services 1,142.9 - 1,142.9
-------- --------- ---------
Gross profit 223.2 - 223.2
Selling, general
and
administrative
expenses 199.4 2.2 201.6
-------- --------- ---------
Earnings from
operations 23.8 (2.2) 21.6
Other expense, net 0.5 - 0.5
-------- --------- ---------
Earnings from
continuing
operations before
taxes 23.3 (2.2) 21.1
Income tax expense
(benefit) 8.3 - 8.3
-------- --------- ---------
Earnings from
continuing
operations $ 15.0 $ (2.2) $ 12.8
======== ========= =========
Earnings per share
from continuing
operations:
Basic $ 0.40 $ (0.06) $ 0.34
Diluted $ 0.40 $ (0.06) $ 0.34
Note: Earnings per share amounts for each quarter are required to be
computed independently and may not equal the amounts computed for the
total year.
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FOR THE 26 WEEKS ENDED JUNE 30, 2013 AND JULY 1, 2012
(UNAUDITED)
(In millions of dollars except per share data)
2013 2012
---------------------------------------- --------
Restruct- Asset
uring Impair-
As Charges ments Adjusted Adjusted %
reported (Note 1) (Note 2) Earnings Earnings Change
-------- --------- --------- -------- -------- ------
Revenue from
services $2,681.7 $ - $ - $2,681.7 $2,720.9 (1.4)%
Cost of services 2,244.1 - - 2,244.1 2,274.0 (1.3)
-------- --------- --------- -------- -------- ------
Gross profit 437.6 - - 437.6 446.9 (2.1)
Selling, general
and
administrative
expenses 412.4 (0.8) - 411.6 410.6 0.2
Asset impairments 1.7 - (1.7) - - NM
-------- --------- --------- -------- -------- ------
Earnings from
operations 23.5 0.8 1.7 26.0 36.3 (28.4)
Other expense,
net 2.6 - - 2.6 1.1 (137.7)
-------- --------- --------- -------- -------- ------
Earnings from
continuing
operations
before taxes 20.9 0.8 1.7 23.4 35.2 (33.5)
Income tax
expense
(benefit) (2.0) - - (2.0) 13.2 (115.4)
-------- --------- --------- -------- -------- ------
Earnings from
continuing
operations $ 22.9 $ 0.8 $ 1.7 $ 25.4 $ 22.0 13.1%
======== ========= ========= ======== ======== ======
Earnings per
share from
continuing
operations:
Basic $ 0.60 $ 0.02 $ 0.04 $ 0.67 $ 0.58 15.5%
Diluted $ 0.60 $ 0.02 $ 0.04 $ 0.67 $ 0.58 15.5%
2012
------------------------------
Restruct-
uring
As Charges Adjusted
reported (Note 1) Earnings
-------- --------- ---------
Revenue from
services $2,720.9 $ - $ 2,720.9
Cost of services 2,274.0 - 2,274.0
-------- --------- ---------
Gross profit 446.9 - 446.9
Selling, general
and
administrative
expenses 408.4 2.2 410.6
Asset impairments - - -
-------- --------- ---------
Earnings from
operations 38.5 (2.2) 36.3
Other expense,
net 1.1 - 1.1
-------- --------- ---------
Earnings from
continuing
operations
before taxes 37.4 (2.2) 35.2
Income tax
expense
(benefit) 13.2 - 13.2
-------- --------- ---------
Earnings from
continuing
operations $ 24.2 $ (2.2) $ 22.0
======== ========= =========
Earnings per
share from
continuing
operations:
Basic $ 0.64 $ (0.06) $ 0.58
Diluted $ 0.64 $ (0.06) $ 0.58
Note: Earnings per share amounts for each quarter are required to be
computed independently and may not equal the amounts computed for the
total year.
KELLY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) information excluding the restructuring
charges and asset impairment charges is useful to understand the
Company's fiscal 2013 financial performance and increases
comparability. Specifically, Management believes that excluding
these items allows for a more meaningful comparison of current
period operating performance with the operating results of prior
periods. These non-GAAP measures may have limitations as analytical
tools because they exclude items which can have a material impact
on cash flow and earnings per share. As a result, Management
considers these measures, along with reported results, when it
reviews and evaluates the Company's financial performance.
Management believes that these measures provide greater
transparency to investors and provide insight into how Management
is evaluating the Company's financial performance. Non-GAAP
measures should not be considered a substitute for, or superior to,
measures of financial performance prepared in accordance with
GAAP.
(1) During the second quarter of 2013, the Company made the decision to
exit the executive search business operating in Germany. The
restructuring charges primarily relate to severance costs from exiting
this business. In the second quarter of 2012, restructuring costs
relate primarily to revisions of the estimated lease termination costs
for EMEA Commercial branches that closed in prior years.
(2) Asset impairment charges represent the write-off of the carrying value
of long-lived assets related to the decision to exit the executive
search business operating in Germany.
ANALYST CONTACT: James Polehna (248) 244-4586
james_polehna@kellyservices.com MEDIA CONTACT: Jane Stehney (248)
244-5630 jane_stehney@kellyservices.com
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